September 2023 Car Insurance Rate Comparison
Between 2022 and 2023, there was a notable 14 percent increase in average annual full coverage car insurance premiums, surging from $1,771 to $2,014. Given these elevated insurance rates, it has become more imperative than ever to actively seek out the most favorable rates. Currently, an estimated 12.6 percent of all drivers are operating their vehicles without insurance. In the event of an accident involving an uninsured driver, your out-of-pocket expenses could skyrocket, underscoring the heightened significance of not merely securing an affordable policy but one that also furnishes substantial financial protection.
Key Insights:
- To ascertain the most suitable rate for your unique requirements, experts widely recommend the practice of comparing car insurance quotes that offer identical coverage limits and endorsements. This approach ensures an apples-to-apples comparison.
- Insurance providers evaluate various factors such as your driving history, claims record, vehicle type, and individual attributes to calculate your auto insurance premiums.
- Typically, drivers aged between 25 and 60 enjoy more affordable car insurance rates, while teenagers and seniors often face higher premiums.
- When conducting a comparative analysis of insurance quotes, it can be advantageous to consider available insurance discounts as an additional factor.
What Are Car Insurance Rates and How Do They Function?
While the terms ‘rate’ and ‘premium’ are often used interchangeably to describe the cost of a car insurance policy, they have distinct meanings. A car insurance rate refers to a unit of cost that insurance companies compute based on individual rating factors, such as a driver’s record and location, to assess the driver’s risk and determine the insurance cost.
Once a driver’s rate is determined, insurance companies also factor in the driver’s chosen coverage options and limits to calculate the estimated premium. The premium represents what a customer pays for coverage during the policy term, typically spanning six or twelve months.
Comparing Car Insurance Rates by Age:
In all states except Massachusetts and Hawaii, insurance providers use age as a factor in determining auto insurance premiums. When examining car insurance premiums by age, it’s common for young drivers under 25 to face higher rates compared to older adults. This discrepancy arises because younger drivers have less experience behind the wheel and are more likely to engage in risky driving behavior.
Bankrate has compiled age-related data from multiple carriers based on 2023 rates obtained from Quadrant Information Services to offer insights into the potential costs at various life stages.
Car Insurance for Teen Drivers:
Teen drivers, due to their inexperience, are statistically more prone to accidents and risky driving behaviors. According to the Centers for Disease Control and Prevention (CDC), teens have the highest crash rate compared to other age groups. Consequently, it is generally more expensive to insure teens than older, more experienced drivers. Bankrate’s analysis shows that, depending on a teen’s age, Nationwide, Geico, and Farmers tend to offer lower average rates for young drivers.
When obtaining car insurance quotes, insurers typically inquire about the ages of all licensed drivers to assess household risk accurately. For parents with teens holding learner’s permits and soon-to-be driver’s licenses, including them as licensed drivers in the quote can help in understanding the actual policy cost once they become licensed. This proactive approach can prevent future surprises regarding policy expenses.
| Carrier | Avg. Annual Full Coverage Premium Age 16* | Avg. Annual Full Coverage Premium Age 18** |
|---|---|---|
| Allstate | $4,461 | $7,089 |
| Amica | $3,682 | $5,423 |
| Auto-Owners | $3,196 | $3,540 |
| Farmers | $3,085 | $6,567 |
| Geico | $2,977 | $4,048 |
| Nationwide | $2,262 | $4,783 |
| Progressive | $3,473 | $7,088 |
| State Farm | $3,139 | $4,066 |
| Travelers | $3,813 | $5,932 |
| USAA | $3,402 | $3,764 |
Compare car insurance rates by company
When shopping for car insurance, experts recommend comparing quotes. Each car insurance provider uses its own underwriting algorithm to determine your rate, so getting quotes from multiple providers will allow you to find a rate that works for both your budget and coverage needs.
Bankrate conducted a large-scale study of insurance premiums across the nation and found that generally, Americans are spending a more significant percentage of their incomes on car insurance than in previous years due to higher rates — making now an especially important time to lock in a cheap one. The chart below might help you spot which companies to research further on your insurance shopping journey:
Compare car insurance rates by driving history
Keeping a clean motor vehicle record (MVR) is typically one of the best ways to avoid premium increases on your car insurance policy. Because car insurance rates are based on risk, high-risk drivers generally pay more for coverage and may have trouble obtaining coverage from standard auto insurers. Insurers will review the driving history of all drivers on the policy by obtaining MVR and Comprehensive Loss Underwriting Exchange (CLUE) reports (which provide your auto claims history) so providing this information up front will help ensure you receive an accurate quote.
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